##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2007



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------

For the transition period from              to

Commission File No. 000-31711



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BOE FINANCIAL SERVICES OF VIRGINIA, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Virginia                                                       |  | 54-1980794                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|                                              |  |           
|--------------------------------------------- |  | ----------
|1325 Tappahannock Boulevard, Tappahannock, VA |  | 22560     
|(Address of principal executive offices)      |  | (Zip Code)

(804) 443-4343

(Registrants telephone number, including area code)



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Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act.

Large accelerated filer ̈Accelerated filer ̈Non-accelerated
filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act.)    Yes ̈No  x

State the number of shares outstanding of each of the issuers classes of common equity as of November 6, 2007.



|                              |  |                               
|----------------------------- |  | ------------------------------
|Class                         |  | Outstanding at Novemer 6, 2007
|Common Stock, $5.00 par value |  | 1,211,246                     

BOE Financial Services of Virginia, Inc.



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##### Table of Contents

FORM 10-Q

INDEX



|                                                                                                         |  |       |  | 
|-------------------------------------------------------------------------------------------------------- |  | ----- |  | 
|                                                                                                         |  | Page 
|PART I  FINANCIAL INFORMATION                                                                           |  |      
|                                                                                                         | 
|Item 1. Financial Statements                                                                             |  | 1-4  
|                                                                                                         | 
|Consolidated Balance Sheets September 30, 2007 and December 31, 2006 and September 30, 2006              |  | 1    
|                                                                                                         | 
|Consolidated Statements of Income Three months ended September 30, 2007 and 2006                         |  | 2    
|                                                                                                         | 
|Consolidated Statements of Income Nine months ended September 30, 2007 and 2006                          |  | 2    
|                                                                                                         | 
|Consolidated Statements of Cash Flows Nine months ended September 30, 2007 and 2006                      |  | 3    
|                                                                                                         | 
|Consolidated Statements of Changes in Stockholders Equity Nine months ended September 30, 2007 and 2006 |  | 4    
|                                                                                                         | 
|Notes to Consolidated Financial Statements                                                               |  | 5-9  
|                                                                                                         | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations            |  | 10-14
|                                                                                                         | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                       |  | 15-16
|                                                                                                         | 
|Item 4. Controls and Procedures                                                                          |  | 16   
|                                                                                                         | 
|PART II  OTHER INFORMATION                                                                              |  |      
|                                                                                                         | 
|Item 1. Legal Proceedings                                                                                |  | 17   
|                                                                                                         | 
|Item 1A. Risk Factors                                                                                    |  | 17   
|                                                                                                         | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                      |  | 17   
|                                                                                                         | 
|Item 3. Defaults Upon Senior Securities                                                                  |  | 17   
|                                                                                                         | 
|Item 4. Submission of Matters to a Vote of Security Holders                                              |  | 17   
|                                                                                                         | 
|Item 5. Other Information                                                                                |  | 17   
|                                                                                                         | 
|Item 6. Exhibits                                                                                         |  | 18   
|                                                                                                         | 
|Signatures                                                                                               |  | 19   



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##### Table of Contents

BOE FINANCIAL SERVICES OF VIRGINIA, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)



|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | ----------------- |  | - | ------- | -
|                                                                                                                                                         |  | September 30,2007 |         |   | December 31,2006 |   |         | September 30,2006 | 
|                                                                                                                                                         |  | (Unaudited)       |         |   | (Audited)        |   |         | (Unaudited)       | 
|Assets                                                                                                                                                   |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Cash and due from banks                                                                                                                                  |  | $                 | 4,619   |   |                  | $ | 5,520   |                   |  | $ | 5,265   |  
|Federal funds sold                                                                                                                                       |  |                   | 966     |   |                  |   |        |                   |  |   | 6,016   |  
|Securities available for sale, at fair value                                                                                                             |  |                   | 49,382  |   |                  |   | 55,963  |                   |  |   | 53,937  |  
|Securities held to maturity, fair value of $2,949, $2,949 and $2,852                                                                                     |  |                   | 3,000   |   |                  |   | 3,000   |                   |  |   | 3,000   |  
|Equity securities, restricted at cost                                                                                                                    |  |                   | 1,761   |   |                  |   | 1,553   |                   |  |   | 1,553   |  
|Loans, net of allowance for loan losses of $2,672, $2,400 and $2,366                                                                                     |  |                   | 213,500 |   |                  |   | 194,491 |                   |  |   | 187,354 |  
|Bank premises and equipment, net                                                                                                                         |  |                   | 10,577  |   |                  |   | 10,454  |                   |  |   | 10,760  |  
|Accrued interest receivable                                                                                                                              |  |                   | 1,526   |   |                  |   | 1,363   |                   |  |   | 1,422   |  
|Intangible assets, net                                                                                                                                   |  |                   | 430     |   |                  |   | 524     |                   |  |   | 556     |  
|Other assets                                                                                                                                             |  |                   | 9,006   |   |                  |   | 8,510   |                   |  |   | 8,225   |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Total assets                                                                                                                                             |  | $                 | 294,767 |   |                  | $ | 281,378 |                   |  | $ | 278,088 |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|                                                                                                                                                         |  |                   |        
|Liabilities and Stockholders Equity                                                                                                                     |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Liabilities                                                                                                                                              |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Deposits:                                                                                                                                                |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Noninterest-bearing                                                                                                                                      |  | $                 | 28,968  |   |                  | $ | 27,809  |                   |  | $ | 29,807  |  
|Interest-bearing                                                                                                                                         |  |                   | 212,022 |   |                  |   | 203,056 |                   |  |   | 202,284 |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Total deposits                                                                                                                                           |  | $                 | 240,990 |   |                  | $ | 230,865 |                   |  | $ | 232,091 |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Federal funds purchased                                                                                                                                  |  |                   |        |   |                  |   | 3,207   |                   |  |   |        |  
|Federal Home Loan Bank advances                                                                                                                          |  |                   | 17,000  |   |                  |   | 12,000  |                   |  |   | 12,000  |  
|Trust preferred capital notes                                                                                                                            |  |                   | 4,124   |   |                  |   | 4,124   |                   |  |   | 4,124   |  
|Accrued interest payable                                                                                                                                 |  |                   | 911     |   |                  |   | 851     |                   |  |   | 883     |  
|Other liabilities                                                                                                                                        |  |                   | 2,394   |   |                  |   | 2,284   |                   |  |   | 889     |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Total liabilities                                                                                                                                        |  | $                 | 265,419 |   |                  | $ | 253,331 |                   |  | $ | 249,987 |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Commitments and Contingent Liabilities                                                                                                                   |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Stockholders Equity                                                                                                                                     |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Preferred stock $5 par value, authorized 1,000,000 shares; no shares issued and outstanding                                                              |  | $                 |        |   |                  | $ |        |                   |  | $ |        |  
|Common stock, $5 par value, authorized 10,000,000 shares; issued and outstanding, 1,211,267 shares, 1,208,109 shares, and 1,203,857 shares,
respectively |  |                   | 6,056   |   |                  |   | 6,041   |                   |  |   | 6,019   |  
|Additional paid-in capital                                                                                                                               |  |                   | 5,551   |   |                  |   | 5,477   |                   |  |   | 5,386   |  
|Retained earnings                                                                                                                                        |  |                   | 18,542  |   |                  |   | 17,256  |                   |  |   | 16,814  |  
|Accumulated other comprehensive loss, net                                                                                                                |  |                   | (801    | ) |                  |   | (727    | )                 |  |   | (118    | )
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Total stockholders equity                                                                                                                               |  | $                 | 29,348  |   |                  | $ | 28,047  |                   |  | $ | 28,101  |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  
|Total liabilities and stockholders equity                                                                                                               |  | $                 | 294,767 |   |                  | $ | 281,378 |                   |  | $ | 278,088 |  
|                                                                                                                                                         |  |                   |         |   |                  |   |         |                   |  |   |         |  

See accompanying notes to consolidated financial statements.



Page: 1



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##### Table of Contents

BOE
FINANCIAL SERVICES OF VIRGINIA, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)



|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|--------------------------------------------------- |  | ------------------------------- | ----- | ------------------------------ | ---- | - | ----- |  | - | ------ | - |  | - | ------ | -
|                                                    |  | Three Months Ended September 30 |       | Nine Months Ended September 30 |     
|                                                    |  | 2007                            |       |                                | 2006 |   | 2007  |  |   | 2006   |  
|Interest and Dividend Income                        |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Interest and fees on loans                          |  | $                               | 4,179 |                                |      | $ | 3,652 |  | $ | 11,980 |   |  | $ | 10,536 |  
|Interest and dividends on securities:               |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|U.S. Treasury                                       |  |                                 | 4     |                                |      |   | 10    |  |   | 12     |   |  |   | 31     |  
|U.S. Government agencies                            |  |                                 | 178   |                                |      |   | 155   |  |   | 575    |   |  |   | 472    |  
|State and political subdivisions, nontaxable        |  |                                 | 324   |                                |      |   | 344   |  |   | 1,017  |   |  |   | 1,025  |  
|State and political subdivisions, taxable           |  |                                 | 33    |                                |      |   | 34    |  |   | 84     |   |  |   | 104    |  
|Other securities                                    |  |                                 | 43    |                                |      |   | 47    |  |   | 134    |   |  |   | 139    |  
|Interest on federal funds sold                      |  |                                 | 19    |                                |      |   | 28    |  |   | 45     |   |  |   | 41     |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Total interest and dividend income                  |  |                                 | 4,780 |                                |      |   | 4,270 |  |   | 13,847 |   |  |   | 12,348 |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Interest Expense                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Interest on deposits                                |  |                                 | 1,909 |                                |      |   | 1,588 |  |   | 5,579  |   |  |   | 4,264  |  
|Interest on borrowings                              |  |                                 | 280   |                                |      |   | 229   |  |   | 838    |   |  |   | 682    |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Total interest expense                              |  |                                 | 2,189 |                                |      |   | 1,817 |  |   | 6,417  |   |  |   | 4,946  |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Net interest income                                 |  |                                 | 2,591 |                                |      |   | 2,453 |  |   | 7,430  |   |  |   | 7,402  |  
|Provision for Loan Losses                           |  |                                 |      |                                |      |   |      |  |   |       |   |  |   | 125    |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Net interest income after provision for loan losses |  |                                 | 2,591 |                                |      |   | 2,453 |  |   | 7,430  |   |  |   | 7,277  |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Noninterest income                                  |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Service charge income                               |  |                                 | 284   |                                |      |   | 258   |  |   | 797    |   |  |   | 779    |  
|Net security gains (losses)                         |  |                                 | (39   | )                              |      |   |      |  |   | (42    | ) |  |   | (19    | )
|Net gains on sales of loans                         |  |                                 | 18    |                                |      |   | 12    |  |   | 21     |   |  |   | 45     |  
|Net (losses) on sale of premises and equipment      |  |                                 |      |                                |      |   |      |  |   |       |   |  |   | (10    | )
|Other income                                        |  |                                 | 183   |                                |      |   | 167   |  |   | 647    |   |  |   | 494    |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Total noninterest income                            |  |                                 | 446   |                                |      |   | 437   |  |   | 1,423  |   |  |   | 1,289  |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Noninterest expenses                                |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Salaries                                            |  |                                 | 967   |                                |      |   | 827   |  |   | 2,717  |   |  |   | 2,408  |  
|Employee benefits and costs                         |  |                                 | 271   |                                |      |   | 252   |  |   | 818    |   |  |   | 731    |  
|Occupancy expenses                                  |  |                                 | 126   |                                |      |   | 131   |  |   | 373    |   |  |   | 309    |  
|Furniture and equipment related expenses            |  |                                 | 119   |                                |      |   | 121   |  |   | 340    |   |  |   | 330    |  
|Data processing                                     |  |                                 | 162   |                                |      |   | 146   |  |   | 453    |   |  |   | 415    |  
|Stationery and printing                             |  |                                 | 51    |                                |      |   | 35    |  |   | 135    |   |  |   | 120    |  
|Postage                                             |  |                                 | 50    |                                |      |   | 31    |  |   | 140    |   |  |   | 135    |  
|Bank franchise tax                                  |  |                                 | 61    |                                |      |   | 60    |  |   | 183    |   |  |   | 178    |  
|Other operating expenses                            |  |                                 | 426   |                                |      |   | 346   |  |   | 1,219  |   |  |   | 1,058  |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Total noninterest expenses                          |  |                                 | 2,233 |                                |      |   | 1,949 |  |   | 6,378  |   |  |   | 5,684  |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Net income before income taxes                      |  |                                 | 804   |                                |      |   | 941   |  |   | 2,475  |   |  |   | 2,882  |  
|Income taxes                                        |  |                                 | 164   |                                |      |   | 235   |  |   | 463    |   |  |   | 672    |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Net income                                          |  | $                               | 640   |                                |      | $ | 706   |  | $ | 2,012  |   |  | $ | 2,210  |  
|                                                    |  |                                 |       |                                |      |   |       |  |   |        |   |  |   |        |  
|Earnings Per Share, basic                           |  | $                               | 0.53  |                                |      | $ | 0.59  |  | $ | 1.66   |   |  | $ | 1.84   |  
|Earnings Per Share, diluted                         |  | $                               | 0.53  |                                |      | $ | 0.58  |  | $ | 1.66   |   |  | $ | 1.83   |  

See accompanying notes to consolidated financial statements.



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##### Table of Contents

BOE FINANCIAL SERVICES OF VIRGINIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2007 and 2006

(in Thousands)



|                                                                                  |  |                   |         |   |                   |   |         |  
|--------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                  |  | September 30,2007 |         |   | September 30,2006 |  
|                                                                                  |  | (Unaudited)       |        
|Cash Flows from Operating Activities                                              |  |                   |         |   |                   |   |         |  
|Net income                                                                        |  | $                 | 2,012   |   |                   | $ | 2,210   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                   |         |   |                   |   |         |  
|Depreciation and amortization                                                     |  |                   | 505     |   |                   |   | 449     |  
|Origination of loans held for sale                                                |  |                   | (3,347  | ) |                   |   | (5,351  | )
|Proceeds from sale of loans held for sale                                         |  |                   | 3,347   |   |                   |   | 5,335   |  
|Provision for loan losses                                                         |  |                   |        |   |                   |   | 125     |  
|Net amortization on securities                                                    |  |                   | 102     |   |                   |   | 141     |  
|Net (gain)/loss on sale of securities                                             |  |                   | 42      |   |                   |   | 19      |  
|(Gain) on sale of loans                                                           |  |                   | (21     | ) |                   |   | (80     | )
|Net loss on disposal of equipment                                                 |  |                   | 5       |   |                   |   | 10      |  
|(Increase) decrease in accrued interest receivable and other assets               |  |                   | 659     |   |                   |   | (171    | )
|Increase in accrued expenses and other liabilities                                |  |                   | 170     |   |                   |   | 23      |  
|                                                                                  |  |                   |         |   |                   |   |         |  
|Net cash provided by operating activities                                         |  | $                 | 3,474   |   |                   | $ | 2,710   |  
|                                                                                  |  |                   |         |   |                   |   |         |  
|                                                                                  |  |                  
|Cash Flows from Investing Activities                                              |  |                   |         |   |                   |   |         |  
|Proceeds from sale of securities available-for-sale                               |  | $                 | 12,597  |   |                   | $ | 3,089   |  
|Proceeds from maturities and calls of                                             |  |                   | 5,052   |   |                   |   | 2,844   |  
|securities available-for-sale                                                     |  |                   | (12,496 | ) |                   |   | (7,695  | )
|Purchase of securities available-for-sale                                         |  |                   | (208    | ) |                   |   | (365    | )
|Purchase of restricted securities                                                 |  |                   | (19,282 | ) |                   |   | (7,272  | )
|Net (increase) in loans to customers                                              |  |                   | (966    | ) |                   |   | (6,016  | )
|Increase in federal funds sold                                                    |  |                   |        |   |                   |   |        |  
|Capital expenditures                                                              |  |                   | (353    | ) |                   |   | (3,239  | )
|                                                                                  |  |                   |         |   |                   |   |         |  
|Net cash (used in) investing activities                                           |  | $                 | (15,656 | ) |                   | $ | (18,654 | )
|                                                                                  |  |                   |         |   |                   |   |         |  
|                                                                                  |  |                  
|Cash Flows from Financing Activities                                              |  |                   |         |   |                   |   |         |  
|Net increase in deposits                                                          |  | $                 | 10,125  |   |                   | $ | 8,959   |  
|Issuance of Common Stock                                                          |  |                   | 89      |   |                   |   | 151     |  
|Decrease in federal funds purchased                                               |  |                   | (3,207  | ) |                   |   | (1,810  | )
|Increase in FHLB Advances                                                         |  |                   | 5,000   |   |                   |   | 7,000   |  
|Dividends paid                                                                    |  |                   | (726    | ) |                   |   | (456    | )
|                                                                                  |  |                   |         |   |                   |   |         |  
|Net cash provided by financing activities                                         |  | $                 | 11,281  |   |                   | $ | 13,844  |  
|                                                                                  |  |                   |         |   |                   |   |         |  
|Net increase (decrease) in cash and cash equivalents                              |  | $                 | (901    | ) |                   | $ | (2,100  | )
|Cash and Cash Equivalents                                                         |  |                   |         |   |                   |   |         |  
|Beginning of period                                                               |  |                   | 5,520   |   |                   |   | 7,365   |  
|                                                                                  |  |                   |         |   |                   |   |         |  
|End of period                                                                     |  | $                 | 4,619   |   |                   | $ | 5,265   |  
|                                                                                  |  |                   |         |   |                   |   |         |  
|Supplemental disclosure of cash flow information                                  |  |                   |         |   |                   |   |         |  
|Cash paid during the year                                                         |  |                   |         |   |                   |   |         |  
|Interest                                                                          |  | $                 | 6,357   |   |                   | $ | 4,582   |  
|Income Taxes                                                                      |  |                   | 490     |   |                   |   | 685     |  

See accompanying notes to consolidated financial statements



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##### Table of Contents

BOE Financial Services of Virginia, Inc.

Consolidated Statements of Changes in Stockholders Equity

For the Nine Month Periods Ended September 30, 2007 and 2006

(in thousands)

(Unaudited)



|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|----------------------------------------------------------------------- |  | ----------- | ----- | -------------------------- | - | ----------------- |  | - | --------------------------------------------- | - |  | -------------------- | ---- | - | ----- | - | ----- | - |  | - | ------ | -
|                                                                        |  | CommonStock |       | Additional Paid-In Capital |   | Retained Earnings |  |   | Accumulated Other Comprehensive Income (Loss) |   |  | Comprehensive Income |      |   | Total |  
|Balance, December 31, 2005                                              |  | $           | 5,990 |                            | $ | 5,264             |  | $ | 15,060                                        |   |  | $                    | (80  | ) |       |   |       |   |  | $ | 26,234 |  
|Comprehensive Income:                                                   |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Net income                                                              |  |             |       |                            |   |                   |  |   | 2,210                                         |   |  |                      |      |   |       | $ | 2,210 |   |  |   | 2,210  |  
|Other comprehensive loss, net of tax:                                   |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Unrealized loss on securities available for sale, net of deferred taxes |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   | (50   | ) |  |   |        |  
|Add: Reclassification adjustment, net of tax                            |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   | 12    |   |  |   |        |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Other comprehensive loss, net of tax:                                   |  |             |       |                            |   |                   |  |   |                                               |   |  |                      | (38  | ) |       |   | (38   | ) |  |   | (38    | )
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Total comprehensive income                                              |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       | $ | 2,172 |   |  |   |        |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Cash dividends, $0.38                                                   |  |             |       |                            |   |                   |  |   | (456                                          | ) |  |                      |      |   |       |   |       |   |  |   | (456   | )
|Issuance of common stock                                                |  |             | 29    |                            |   | 122               |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   | 151    |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Balance, September 30, 2006                                             |  | $           | 6,019 |                            | $ | 5,386             |  | $ | 16,814                                        |   |  | $                    | (118 | ) |       |   |       |   |  | $ | 28,101 |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|                                                                        |  |             |       |                            |   |                  
|                                                                        |  | CommonStock |       | Additional Paid-In Capital |   | Retained Earnings |  |   | Accumulated Other Comprehensive Income (Loss) |   |  | Comprehensive Income |      |   | Total |  
|Balance, December 31, 2006                                              |  | $           | 6,041 |                            | $ | 5,477             |  | $ | 17,256                                        |   |  | $                    | (727 | ) |       |   |       |   |  | $ | 28,047 |  
|Comprehensive Income:                                                   |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Net income                                                              |  |             |       |                            |   |                   |  |   | 2,012                                         |   |  |                      |      |   |       | $ | 2,012 |   |  |   | 2,012  |  
|Other comprehensive loss, net of tax:                                   |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Unrealized loss on securities available for sale, net of deferred taxes |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   | (105  | ) |  |   |        |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Add:Reclassification adjustment, net of tax                             |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   | 31    |   |  |   |        |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Other Comprehensive loss, net of tax                                    |  |             |       |                            |   |                   |  |   |                                               |   |  |                      | (74  | ) |       |   | (74   | ) |  |   | (74    | )
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Total comprehensive income                                              |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       | $ | 1,938 |   |  |   |        |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Cash dividend, $0.60 per share                                          |  |             |       |                            |   |                   |  |   | (726                                          | ) |  |                      |      |   |       |   |       |   |  |   | (726   | )
|Issuance of common stock                                                |  |             | 15    |                            |   | 74                |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   | 89     |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  
|Balance, September 30, 2007                                             |  | $           | 6,056 |                            | $ | 5,551             |  | $ | 18,542                                        |   |  | $                    | (801 | ) |       |   |       |   |  | $ | 29,348 |  
|                                                                        |  |             |       |                            |   |                   |  |   |                                               |   |  |                      |      |   |       |   |       |   |  |   |        |  

See accompanying notes to consolidated financial statements



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BOE FINANCIAL SERVICES OF VIRGINIA, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1. The accounting and reporting policies of BOE
Financial Services of Virginia, Inc. (the Company) conform to accounting principles generally accepted in the United States of America and to the general practices within the banking industry. The interim financial statements have not
been audited; however, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the consolidated financial statements have been included. Operating results for the three and
nine month periods ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

These financial statements should be read in conjunction with the financial statements and the footnotes included in the Companys 2006 Annual Report to Shareholders. Certain reclassifications have been made to
prior period balances to conform to the current period presentation.

2. Earnings per share are based on the weighted average number of common shares and
common stock equivalents outstanding during the applicable periods. Potential dilutive common stock had no material effect on income available to common shareholders. No shares were excluded from the calculation because the effect would be
anti-dilutive.



|                                 |  |                    |  |                    |      |        |           |           |   |     
|-------------------------------- |  | ------------------ |  | ------------------ | ---- | ------ | --------- | --------- | - | ----
|                                 |  | Nine Months Ended 
|                                 |  | September 30, 2007 |  | September 30, 2006
|                                 |  | Shares             |  | Per Share          |      | Shares |           | Per Share
|Basic earnings per share         |  | 1,209,238          |  | $                  | 1.66 |        | 1,200,259 |           | $ | 1.84
|Effect of dilutive stock options |  | 5,718              |  |                    |      |        | 9,614     |           |   |     
|                                 |  |                    |  |                    |      |        |           |           |   |     
|Diluted earnings per share       |  | 1,214,956          |  | $                  | 1.66 |        | 1,209,873 |           | $ | 1.83
|                                 |  |                    |  |                    |      |        |           |           |   |     
|                                 | 
|                                 |  | Three Months Ended
|                                 |  | September 30, 2007 |  | September 30, 2006
|                                 |  | Shares             |  | Per Share          |      | Shares |           | Per Share
|Basic earnings per share         |  | 1,210,233          |  | $                  | 0.53 |        | 1,202,243 |           | $ | 0.59
|Effect of dilutive stock options |  | 3,462              |  |                    |      |        | 8,065     |           |   |     
|                                 |  |                    |  |                    |      |        |           |           |   |     
|Diluted earnings per share       |  | 1,213,695          |  | $                  | 0.53 |        | 1,210,308 |           | $ | 0.58
|                                 |  |                    |  |                    |      |        |           |           |   |     



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3. Loans are shown on the balance sheets net of unearned discounts and the allowance for loan losses. Interest is
computed by methods which result in level rates of return on principal. Loans are charged off when in the opinion of management they are deemed to be uncollectable after taking into consideration such factors as the current financial condition of
the customer and the underlying collateral and guarantees. Loan fees and origination costs are deferred and the net amount amortized as an adjustment of the related loans yield using the level yield method. Bank of Essex (the Bank), a
wholly owned subsidiary of the Company, is amortizing these amounts over the contractual life of the related loans.



|                               |  |                    |         |   |                   |   |         |                    |  |   |         |  
|------------------------------ |  | ------------------ | ------- | - | ----------------- | - | ------- | ------------------ |  | - | ------- | -
|(Dollars in thousands)         |  | September 30, 2007 |         |   | December 31, 2006 |   |         | September 30, 2006 | 
|Loans:                         |  |                    |         |   |                   |   |         |                    |  |   |         |  
|Commercial                     |  | $                  | 21,970  |   |                   | $ | 22,934  |                    |  | $ | 24,672  |  
|Real Estate                    |  |                    | 153,121 |   |                   |   | 138,008 |                    |  |   | 126,578 |  
|Real Estateconstruction       |  |                    | 34,602  |   |                   |   | 29,984  |                    |  |   | 32,328  |  
|Installment & other loans      |  |                    | 6,479   |   |                   |   | 5,965   |                    |  |   | 6,142   |  
|                               |  |                    |         |   |                   |   |         |                    |  |   |         |  
|Total loans                    |  |                    | 216,172 |   |                   |   | 196,891 |                    |  |   | 189,720 |  
|Less allowance for loan losses |  |                    | (2,672  | ) |                   |   | (2,400  | )                  |  |   | (2,366  | )
|                               |  |                    |         |   |                   |   |         |                    |  |   |         |  
|Net loans                      |  | $                  | 213,500 |   |                   | $ | 194,491 |                    |  | $ | 187,354 |  
|                               |  |                    |         |   |                   |   |         |                    |  |   |         |  

4. The Companys allowance for loan losses was as follows at the dates indicated:



|                                              |  |                    |       |   |                   |   |       |                    |  |   |       |  
|--------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | ------------------ |  | - | ----- | -
|(Dollars in thousands)                        |  | September 30, 2007 |       |   | December 31, 2006 |   |       | September 30, 2006 | 
|Balance January 1                             |  | $                  | 2,400 |   |                   | $ | 2,249 |                    |  | $ | 2,249 |  
|Provision charged against income (loans)      |  |                    |      |   |                   |   | 125   |                    |  |   | 125   |  
|Provision charged against income (overdrafts) |  |                    | 6     |   |                   |   |      |                    |  |   |      |  
|Recoveries                                    |  |                    | 427   |   |                   |   | 164   |                    |  |   | 81    |  
|Loans charged off                             |  |                    | (161  | ) |                   |   | (138  | )                  |  |   | (89   | )
|                                              |  |                    |       |   |                   |   |       |                    |  |   |       |  
|Balance at end of period                      |  | $                  | 2,672 |   |                   | $ | 2,400 |                    |  | $ | 2,366 |  
|                                              |  |                    |       |   |                   |   |       |                    |  |   |       |  

5. Defined Benefit Pension Plan

Components of Net Periodic Benefit Cost

(In Thousands)



|                                             |  |                                 |      |   |                                  |   |      |      |  |   |      |   |  |   |     |  
|-------------------------------------------- |  | ------------------------------- | ---- | - | -------------------------------- | - | ---- | ---- |  | - | ---- | - |  | - | --- | -
|                                             |  | Pension Benefits                |     
|                                             |  | Nine Months Ended September 30, |      |   | Three Months Ended September 30, |  
|                                             |  | 2007                            |      |   | 2006                             |   |      | 2007 |  |   | 2006 |  
|Service cost                                 |  | $                               | 246  |   |                                  | $ | 273  |      |  |   | 82   |   |  | $ | 91  |  
|Interest cost                                |  |                                 | 204  |   |                                  |   | 183  |      |  |   | 68   |   |  |   | 61  |  
|Expected return on plan assets               |  |                                 | (219 | ) |                                  |   | (195 | )    |  |   | (73  | ) |  |   | (65 | )
|Amortization of prior service cost           |  |                                 | 3    |   |                                  |   | 3    |      |  |   | 1    |   |  |   | 1   |  
|Amortization of net obligation at transition |  |                                 | (3   | ) |                                  |   | (3   | )    |  |   | (1   | ) |  |   | (1  | )
|Amortization of net loss                     |  |                                 | 27   |   |                                  |   | 42   |      |  |   | 9    |   |  |   | 14  |  
|                                             |  |                                 |      |   |                                  |   |      |      |  |   |      |   |  |   |     |  
|Net periodic benefit cost                    |  | $                               | 258  |   |                                  | $ | 303  |      |  | $ | 86   |   |  | $ | 101 |  
|                                             |  |                                 |      |   |                                  |   |      |      |  |   |      |   |  |   |     |  



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Employer Contributions

The
Company previously disclosed in its financial statements for the year ended December 31, 2006, that it expected not to contribute to its pension plan in 2007. As of September 30, 2007, no contributions have been made.

6. Stock Option Plans

During the fiscal year ended
December 31, 2000, the Company adopted stock option plans for all employees and outside directors. The plans provide that 110,000 shares of the Companys common stock will be reserved for both incentive and non-statutory stock options to
purchase common stock of the Company. The exercise price per share for incentive and non-statutory stock options shall not be less than the fair market value of a share of common stock on the date of grant, and may be exercised at such times as may
be specified by the Board of Directors in the participants stock option agreement. Each incentive and non-statutory stock option shall expire not more than ten years from the date the option is granted. The options vest at the rate of one
quarter per year from the grant date.

A summary of the status of the stock option plan activity for the nine months ended
September 30, 2007 is summarized below:



|                                                        |  |                  |   |  |                                 |       |                                             |            |                           |   |        
|------------------------------------------------------- |  | ---------------- | - |  | ------------------------------- | ----- | ------------------------------------------- | ---------- | ------------------------- | - | -------
|                                                        |  | Number of Shares |   |  | Weighted Average Exercise Price |       | Weighted Average Remaining Contractual Term |            | Aggregate Intrinsic Value
|Outstanding, January 1, 2007                            |  | 29,718           |   |  | $                               | 23.92 |                                             |            |                           |   |        
|Exercised (during the quarter ended September 30, 2007) |  | (359             | ) |  |                                 | 28.70 |                                             |            |                           |   |        
|                                                        |  |                  |   |  |                                 |       |                                             |            |                           |   |        
|Outstanding, September 30,                              |  | 29,359           |   |  |                                 | 23.86 |                                             | 5.75 years |                           | $ | 147,924
|                                                        |  |                  |   |  |                                 |       |                                             |            |                           |   |        
|Exercisable, September 30,                              |  | 29,359           |   |  |                                 | 23.86 |                                             | 5.75 years |                           | $ | 147,924
|                                                        |  |                  |   |  |                                 |       |                                             |            |                           |   |        

The aggregate intrinsic value of a stock option in the table above represents the total pre-tax
intrinsic value (the amount by which the current market value of the underlying stock exceeds the option price of the option) that would have been received by the option holders had all option holders exercised their options on September 30,
2007. This amount changes based on changes in the market value of the Companys stock.

The total intrinsic value of options exercised for the nine
months ended September 30, 2007 was $878.

No stock-based compensation expense was recorded for the quarter ended and nine months ended
September 30, 2007 or 2006 as no options were granted and all outstanding options were fully vested.



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7. Securities

Amortized
costs and fair values of securities available for sale at September 30, 2007 and December 31, 2006 were as follows:

(In Thousands)



|                                                |  |                    |        |                        |   |                           |  |   |            |   |  |   |       
|----------------------------------------------- |  | ------------------ | ------ | ---------------------- | - | ------------------------- |  | - | ---------- | - |  | - | ------
|                                                |  | Amortized Cost     |        | Gross Unrealized Gains |   | Gross Unrealized (Losses) |  |   | Fair Value
|                                                |  | September 30, 2007
|U.S. Treasury securities                        |  | $                  | 499    |                        | $ |                          |  | $ | (7         | ) |  | $ | 492   
|U.S. Agency and mortgage-backed securities      |  |                    | 11,421 |                        |   | 2                         |  |   | (200       | ) |  |   | 11,223
|Obligations of state and political subdivisions |  |                    | 36,845 |                        |   | 110                       |  |   | (431       | ) |  |   | 36,524
|Corporate debt securities                       |  |                    | 702    |                        |   | 6                         |  |   |           |   |  |   | 708   
|Other equity securities                         |  |                    | 81     |                        |   | 356                       |  |   | (2         | ) |  |   | 435   
|                                                |  |                    |        |                        |   |                           |  |   |            |   |  |   |       
|                                                |  | $                  | 49,548 |                        | $ | 474                       |  | $ | (640       | ) |  | $ | 49,382
|                                                |  |                    |        |                        |   |                           |  |   |            |   |  |   |       
|                                                |  |                    |        |                       
|                                                |  | Amortized Cost     |        | Gross Unrealized Gains |   | Gross Unrealized (Losses) |  |   | Fair Value
|                                                |  | December 31, 2006 
|U.S. Treasury securities                        |  | $                  | 999    |                        | $ |                          |  | $ | (19        | ) |  | $ | 980   
|U.S. Agency and mortgage-backed securities      |  |                    | 15,374 |                        |   | 11                        |  |   | (259       | ) |  |   | 15,126
|Obligations of state and political subdivisions |  |                    | 38,298 |                        |   | 247                       |  |   | (321       | ) |  |   | 38,224
|Corporate debt securities                       |  |                    | 1,281  |                        |   | 12                        |  |   | (5         | ) |  |   | 1,288 
|Other equity securities                         |  |                    | 65     |                        |   | 280                       |  |   |           |   |  |   | 345   
|                                                |  |                    |        |                        |   |                           |  |   |            |   |  |   |       
|                                                |  | $                  | 56,017 |                        | $ | 550                       |  | $ | (604       | ) |  | $ | 55,963
|                                                |  |                    |        |                        |   |                           |  |   |            |   |  |   |       

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that
individual securities have been in a continuous gross unrealized loss position, at September 30, 2007 and December 31, 2006 were as follows:



|                                                |  |                     |        |                         |                   |      |            |       |                         |        |  |            |      |                         |  |   |        |  |   |      |  
|----------------------------------------------- |  | ------------------- | ------ | ----------------------- | ----------------- | ---- | ---------- | ----- | ----------------------- | ------ |  | ---------- | ---- | ----------------------- |  | - | ------ |  | - | ---- | -
|                                                |  | Less than 12 months |        |                         | 12 months or more |      |            | Total |                        
|                                                |  | Fair Value          |        | Gross Unrealized Losses |                   |      | Fair Value |       | Gross Unrealized Losses |        |  | Fair Value |      | Gross Unrealized Losses | 
|                                                |  | September 30, 2007  |       
|U.S. Treasury securities                        |  | $                   |       |                         | $                 |     |            |       | $                       | 492    |  | $          | (7   | )                       |  | $ | 492    |  | $ | (7   | )
|U.S. Agency and mortgage- backed securities     |  |                     | 5,886  |                         |                   | (52  | )          |       |                         | 8,215  |  |            | (148 | )                       |  |   | 14,101 |  |   | (200 | )
|Obligations of state and political subdivisions |  |                     | 8,925  |                         |                   | (111 | )          |       |                         | 14,813 |  |            | (320 | )                       |  |   | 23,738 |  |   | (431 | )
|Corporate debt securities                       |  |                     |       |                         |                   |     |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  
|Other equity securities                         |  |                     | 12     |                         |                   | (2   | )          |       |                         |       |  |            |     |                         |  |   | 12     |  |   | (2   | )
|                                                |  |                     |        |                         |                   |      |            |       |                         |        |  |            |      |                         |  |   |        |  |   |      |  
|                                                |  | $                   | 14,823 |                         | $                 | (165 | )          |       | $                       | 23,520 |  | $          | (475 | )                       |  | $ | 38,343 |  | $ | (640 | )
|                                                |  |                     |        |                         |                   |      |            |       |                         |        |  |            |      |                         |  |   |        |  |   |      |  



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|                                                |  |                     |       |                         |                   |     |            |       |                         |        |  |            |      |                         |  |   |        |  |   |      |  
|----------------------------------------------- |  | ------------------- | ----- | ----------------------- | ----------------- | --- | ---------- | ----- | ----------------------- | ------ |  | ---------- | ---- | ----------------------- |  | - | ------ |  | - | ---- | -
|                                                |  | Less than 12 months |       |                         | 12 months or more |     |            | Total |                        
|                                                |  | Fair Value          |       | Gross Unrealized Losses |                   |     | Fair Value |       | Gross Unrealized Losses |        |  | Fair Value |      | Gross Unrealized Losses | 
|                                                |  | December 31, 2006   |      
|U.S. Treasury securities                        |  | $                   | 497   |                         | $                 | (3  | )          |       | $                       | 483    |  | $          | (16  | )                       |  | $ | 980    |  | $ | (19  | )
|U.S. Agency and mortgage-backed securities      |  |                     | 2,161 |                         |                   | (9  | )          |       |                         | 9,090  |  |            | (250 | )                       |  |   | 11,251 |  |   | (259 | )
|Obligations of state and political subdivisions |  |                     | 6,532 |                         |                   | (27 | )          |       |                         | 14,835 |  |            | (294 | )                       |  |   | 21,367 |  |   | (321 | )
|Corporate debt securities                       |  |                     | 497   |                         |                   | (5  | )          |       |                         |       |  |            |     |                         |  |   | 497    |  |   | (5   | )
|Other equity securities                         |  |                     |      |                         |                   |    |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  
|                                                |  |                     |       |                         |                   |     |            |       |                         |        |  |            |      |                         |  |   |        |  |   |      |  
|                                                |  | $                   | 9,687 |                         | $                 | (44 | )          |       | $                       | 24,408 |  | $          | (560 | )                       |  | $ | 34,095 |  | $ | (604 | )
|                                                |  |                     |       |                         |                   |     |            |       |                         |        |  |            |      |                         |  |   |        |  |   |      |  

Management continually monitors the fair value and credit quality of the Companys investment portfolio. No
impairment is considered permanent as the Company has the positive ability and intent of holding the securities until maturity or recovery of value.

Amortized costs and fair values of securities held to maturity at September 30, 2007 and December 31, 2006 were as follows:



|                                           |  |                    |       |                        |   |                           |  |   |            |   |  |   |      
|------------------------------------------ |  | ------------------ | ----- | ---------------------- | - | ------------------------- |  | - | ---------- | - |  | - | -----
|                                           |  | Amortized Cost     |       | Gross Unrealized Gains |   | Gross Unrealized (Losses) |  |   | FairValue 
|                                           |  | September 30, 2007
|U.S. Agency and mortgage-backed securities |  |                    | 3,000 |                        |   |                          |  | $ | (51        | ) |  | $ | 2,949
|                                           |  |                    |       |                        |   |                           |  |   |            |   |  |   |      
|                                           |  | $                  | 3,000 |                        | $ |                          |  | $ | (51        | ) |  | $ | 2,949
|                                           |  |                    |       |                        |   |                           |  |   |            |   |  |   |      
|                                           |  |                    |       |                       
|                                           |  | Amortized Cost     |       | Gross Unrealized Gains |   | Gross Unrealized (Losses) |  |   | Fair Value
|                                           |  | December 31, 2006 
|U.S. Agency and mortgage-backed securities |  |                    | 3,000 |                        |   |                          |  | $ | (51        | ) |  | $ | 2,949
|                                           |  |                    |       |                        |   |                           |  |   |            |   |  |   |      
|                                           |  | $                  | 3,000 |                        | $ |                          |  | $ | (51        | ) |  | $ | 2,949
|                                           |  |                    |       |                        |   |                           |  |   |            |   |  |   |      

The fair value and gross unrealized losses for securities held to maturity, totaled by the length of time that
individual securities have been in a continuous gross unrealized loss position, at September 30, 2007 and December 31, 2006 were as follows:



|                                           |  |                     |   |                         |   |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  
|------------------------------------------ |  | ------------------- | - | ----------------------- | - | ---------- | ----- | ----------------------- | ----- |  | ---------- | --- | ----------------------- |  | - | ----- |  | - | --- | -
|                                           |  | Less than 12 months |   | 12 months or more       |   |            | Total |                        
|                                           |  | Fair Value          |   | Gross Unrealized Losses |   | Fair Value |       | Gross Unrealized Losses |       |  | Fair Value |     | Gross Unrealized Losses | 
|                                           |  | September 30, 2007  |  
|U.S. Agency and mortgage-backed securities |  |                     |  |                         |   |           |       | $                       | 2,949 |  | $          | (51 | )                       |  |   | 2,949 |  |   | (51 | )
|                                           |  |                     |   |                         |   |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  
|                                           |  | $                   |  |                         | $ |           |       | $                       | 2,949 |  | $          | (51 | )                       |  | $ | 2,949 |  | $ | (51 | )
|                                           |  |                     |   |                         |   |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  
|                                           |  |                     |  
|                                           |  | Less than 12 months |   | 12 months or more       |   |            | Total |                        
|                                           |  | Fair Value          |   | Gross Unrealized Losses |   | Fair Value |       | Gross Unrealized Losses |       |  | Fair Value |     | Gross Unrealized Losses | 
|                                           |  | December 31, 2006   |  
|U.S. Agency and mortgage-backed securities |  |                     |  |                         |   |           |       | $                       | 2,949 |  | $          | (51 | )                       |  | $ | 2,949 |  | $ | (51 | )
|                                           |  |                     |   |                         |   |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  
|                                           |  | $                   |  |                         | $ |           |       | $                       | 2,949 |  | $          | (51 | )                       |  | $ | 2,949 |  | $ | (51 | )
|                                           |  |                     |   |                         |   |            |       |                         |       |  |            |     |                         |  |   |       |  |   |     |  



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##### Table of Contents

|Item 2. | 
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | ---------------------------------------------------------------------------------------

General

The Companys financial statements are prepared in accordance with accounting principles generally accepted in the United States
(GAAP). The financial information contained within the statements is, to a significant extent, financial information that is based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could
affect the ultimate value that is obtained either when earning income, recognizing an expense, recovering an asset or relieving a liability. The Company uses historical loss factors as one factor in determining the inherent loss that may be present
in its loan portfolio. Actual losses could differ significantly from the historical factors that the Company uses. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of the
Companys transactions would be the same, the timing of events that would impact its transactions could change.

Forward-Looking Statements

Certain statements contained in this report that are not historical facts are forward-looking statements that are subject to certain risks
and uncertainties. When used herein, the terms anticipates, plans, expects, believes and similar expressions as they relate to the Company or its management are intended to identify such
forward-looking statements. The Companys actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements.

CRITICAL ACCOUNTING POLICIES

Allowance for Loan Losses

The allowance for loan losses is an estimate of the losses that may be sustained in the Companys loan portfolio. The allowance is based on two basic
principles of accounting: (i) SFAS 5, Accounting for Contingencies,which requires that losses be accrued when they are probable of occurring and estimatable and (ii) SFAS 114, Accounting by Creditors for Impairment of a Loan,which requires that losses be accrued based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the loan balance. The use of these values is inherently
subjective and actual losses could be greater or less than the estimates.

The allowance for loan losses is increased by charges to income
and decreased by charge-offs (net of recoveries). Managements periodic evaluation of the adequacy of the allowance is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the
borrowers ability to repay, the estimated value of any underlying collateral, and current economic conditions.

The following
discussion is intended to assist readers in understanding and evaluating the financial condition and results of operations of the Company and the Bank. This section should be read in conjunction with the Companys consolidated financial
statements and accompanying notes included elsewhere in this report.

Overview

On September 30, 2007 the Company had total assets of $294.767 million, an increase of $13.389 million, or 4.76% from $281.378 million at
December 31, 2006. Total assets at September 30, 2006 were $278.088 million. The September 30, 2007 total assets figure represents an increase of 6.00%, or $16.679 million over one year ago. Total loans amounted to $216.172 million on
September 30, 2007, an increase of $19.281 million, or 9.79%, over December 31, 2006 total loans of $196.891 million. The September 30, 2007 figure represents an increase of $26.452 million, or 13.94% over total loans of $189.720
million on September 30, 2006. The Companys available-for-sale securities portfolio decreased $6.581 million, or 11.76%, from $55.963 million at December 31, 2006 to $49.382 million at September 30, 2007.



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##### Table of Contents

Total available-for-sale securities were $53.937 million on September 30, 2006. The Company had federal funds sold
of $966,000 on September 30, 2007, federal funds purchased of $3.207 million on December 31, 2006 and federal funds sold of $6.016 million on September 30, 2006.

The Company is required to account for the effect of market changes in the value of securities available-for-sale (AFS) under SFAS 115. The market value
of the September 30, 2007 securities AFS portfolio was $49.382 million compared to a book value $49.548 million. At December 31, 2006 market value of the available-for-sale portfolio was $55.963 compared to a book value of $56.018 million.
On September 30, 2006 the market value of the available-for-sale portfolio was $53.937 million with an associated book value of $54.118 million. The impact of the change in market value of AFS securities, net of deferred income taxes, is
reflected in the Statement of Changes in Stockholders Equity under Accumulated Other Comprehensive Income (Loss).

Total deposits at
September 30, 2007 were $240.990 million. This $10.125 million increase is 4.39% greater than total deposits of $230.865 million at December 31, 2006 and $8.899 million, or 3.83% greater than total deposits of $232.091 million at
September 30, 2006.

Stockholders equity at September 30, 2007 was $29.348 million and represented 9.96% of total assets.
Stockholders equity was $28.047 million, or 9.97% of total assets at December 31, 2006 and $28.101 million, or 10.11% of total assets at September 30, 2006.

Results of Operations

Net Income

Net income was $640,000 for the third quarter of 2007, or $0.53 per diluted share. This compares to net income of $706,000, or $0.58 per diluted share in the third quarter of 2006. The decrease in earnings in the
third quarter of 2007 compared to 2006 was $66,000, or 9.35%.

The decrease in earnings was primarily attributable to a $284,000, or
14.57%, increase in noninterest expenses for the third quarter of 2007. Noninterest expenses were $2.233 million for the third quarter of 2007 compared to $1.949 million for the same period in 2006. Salaries were the largest component of this
increase, up $140,000, or 16.93%, for the third quarter of 2007 compared to the same period in 2006. This increase in salaries was largely composed of adding additional banking staff to operate two new branches in Northumberland County, Virginia,
both of which the Company anticipates opening in the fourth quarter of 2007.

Offsetting this decrease to net income for the quarter ended
September 20, 2007 were an increase of $138,000, or 5.63%, to net interest income after provision for loan losses, an increase of $9,000 to total noninterest income and a decrease of $71,000, or 30.21%, to income tax expense.

For the nine months ended September 30, 2007, net income was $2.012 million, down 8.96%, or $198,000, from net income of $2.210 million for the same
period in 2006. This represents a decrease in earnings per share, on a diluted basis of $0.17, or 9.29%, from $1.83 to $1.66. Noninterest expenses increased 12.21%, or $694,000, primarily due to a full year of expenses associated with the
Companys new headquarters and branch banking facility that opened mid-year 2006 and from additional staffing and operating expense mentioned above in relation to entering new banking markets. Total noninterest expenses were $6.378 million
through nine months of 2007 compared to $5.684 million for the same period in 2006.

Offsetting this decrease to net income was an increase
of $28,000 to net interest income, an increase of $134,000 to total noninterest income, a decrease of $125,000 to provision for loan losses and a reduction of income tax expense of $209,000 for the nine month period ended September 30, 2007.



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Net Interest Income

The Companys results of operations are significantly affected by its ability to manage effectively the interest rate sensitivity and maturity of its interest-earning assets and interest-bearing liabilities. At September 30, 2007,
the Companys interest-earning assets exceeded its interest-bearing liabilities by approximately $35.463 million, compared with a $33.452 million excess one year ago. Net interest margins on a fully tax equivalent basis were 3.96% through
September 30, 2007 compared to 4.24% through September 30, 2006. The decrease in net interest margin was the result of an increase of 30 basis points in yield on total earning assets coupled with an increase of 59 basis points in the cost
of total sources of funds. The Companys yield on average earning assets, on a fully tax equivalent and annualized basis, was 7.10% for the first nine months of 2007 compared to 6.80% for the first nine months of 2006. Total cost of funds was
3.15% for the first nine months of 2007 compared to 2.56% for the same period in 2006.

The Companys loan-to-deposit ratio was 87.53,
on average, through the first nine months of 2007 compared to 84.10% for the same period in 2006. On September 30, 2007, the Companys loan-to-deposit ratio was 89.70% compared to 85.28% on December 31, 2006 and 81.74% on
September 30, 2006.

Provision for Loan Losses

The Companys provision for loan losses was $0 for the third quarter of 2007 and also in the third quarter of 2006. During the third quarter of 2007 the Company realized a recovery of $400,000 of a loan charged-off in 2002. This has
bolstered the Companys allowance for loan losses. Allowance for loan losses was $2.672 million on September 30, 2007 compared to $2.400 million on December 31, 2006 and $2.366 million on September 30, 2006. This was 1.24%, 1.22%
and 1.25% of total loans for September 30, 2007, December 31, 2006 and September 30, 2006, respectively.

For the third
quarter of 2007 the Company had net recoveries of $304,000 represented by charged-off loans of $105,000 and recoveries of $409,000. For the nine months ended September 30, 2007 the Company had net recoveries of $266,000 represented by
charged-off loans of $161,000 and recoveries of $427,000. This compares to net charged-off loans of $16,000 for the third quarter of 2006 and net charged-off loans of $8,000 for the first nine months of 2006.

Noninterest Income

Noninterest income was $446,000 in the
third quarter of 2007 compared to $437,000 in the same period of 2006. This represents an increase of 2.06%, or $9,000. Service charges on deposit accounts were $284,000 in the third quarter of 2007 and $258,000 in the third quarter of 2006. This is
an increase of 1.01%, or $26,000. Securities losses were $39,000 in the third quarter of 2007 and $0 for the same period in 2006. Other noninterest income increased 9.58% or $16,000, from $167,000 in the third quarter of 2006 to $183,000 in the
third quarter of 2007.

For the nine month period ended September 30, 2007 noninterest income of $1,423,000 was an increase of
$134,000, or 10.40%, from noninterest income of $1,289,000 for the first nine months of 2006. Service charges on deposit accounts were $797,000 for the period compared to $779,000 in 2006. This is an increase of 2.31%, or $18,000. Other income
increased $153,000, or 30.97% and was $647,000 for the first nine months of 2007 compared to $494,000 for the same period in 2006.

Noninterest Expenses

Noninterest expenses were $2.233 million and increased $284,000, or 14.57%, in the third quarter of 2007 compared to 2006. Salaries
increased, $140,000, from $827,000 in the



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##### Table of Contents

third quarter of 2006 to $967,000 in the third quarter of 2007. Other operating expenses increased $80,000, or 23.23%, in the third quarter of 2007 and were
$426,000 compared to $346,000 for the same period in 2006. Employee benefits and postage expenses each increased $19,000 and data processing expenses as well as stationery and printing expenses increased $16,000 each for the third quarter of 2007
compared to the same period in 2006.

For the nine month period ended September 30, 2007 noninterest expenses were $6.378 million, a
$694,000, or 12.21%, increase over noninterest expenses of $5.684 million for the first nine months of 2006. Salaries increased $309,000, or 12.83%, and were $2.717 million for the first nine months of 2007 compared to $2.408 million for the same
period in 2006. Other operating expenses increased $161,000, or 15.22%, and were $1.219 million for the nine months ended September 30, 2007 compared to $1.058 million for the same period in 2006. Additional noninterest expense increases for
the nine month period ended September 30, 2007 compared to the same period in 2006 were an $87,000 increase in employee benefits and costs, a $64,000 increase in occupancy expenses, an increase of $38,000 increase in data processing expenses a
$15,000 increase in stationery and printing costs, a $10,000 increase in furniture and equipment related expenses and a $5,000 increase in both postage expenses and Bank franchise tax expense.

Income Taxes

Income tax expense was $164,000 in the third
quarter of 2007. This represents a decrease of $71,000 compared to $235,000 of income tax expense in the third quarter of 2006. Income tax expense for the nine month period ended September 30, 2007 was $463,000 compared to $672,000 for the same
period in 2006. This represents a decrease of $209,000 and is primarily the result of a lower effective tax rate due to the addition of $5.500 million in Bank Owned Life Insurance and tax exempt municipal income.

Asset Quality

The Companys allowance for loan losses
totaled $2.672 million on September 30, 2007, or 1.24% of total loans. On December 31, 2006, the allowance for loan losses totaled $2.400 million and was 1.23% of total loans. On September 30, 2006, the allowance for credit losses was
$2.366 million and was 1.25% of total loans.

On September 30, 2007, the Company had nonaccruing assets of $206,000 compared to
$34,000 on September 30, 2006. Loans past due and still accruing interest totaled $13,000 on September 30, 2007 compared to $78,000 on September 30, 2006.

Capital Requirements

The determination of capital adequacy depends upon a number of factors, such as asset
quality, liquidity, earnings, growth trends and economic conditions. The Company seeks to maintain a strong capital base to support its growth and expansion plans, provide stability to current operations and promote public confidence in the Company.

The federal banking regulators have defined three tests for assessing the capital strength and adequacy of banks, based on two definitions
of capital. Tier 1 Capital is defined as a combination of common and qualifying preferred stockholders equity less goodwill. Tier 2 Capital is defined as qualifying subordinated debt and a portion of the allowance for
loan losses. Total Capital is defined as Tier 1 Capital plus Tier 2 Capital.

Three risk-based capital ratios are computed
using the above capital definitions, total assets and risk-weighted assets and are measured against regulatory minimums to ascertain adequacy. All assets and off-balance sheet risk items are grouped into categories according to degree of risk and
assigned a risk-weighting and the resulting total is risk-weighted assets. Tier 1 Risk-based Capital is Tier 1 Capital divided by risk-weighted assets. Total Risk-based Capital is Total Capital divided by risk-weighted
assets. The Leverage ratio is Tier 1 Capital divided by total average assets.



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##### Table of Contents

The Companys ratio of Total Capital to risk-weighted assets was 15.92% on September 30, 2007 compared to
14.45% on September 30, 2006. Its ratio of Tier 1 Capital to risk-weighted assets was 14.85% on September 30, 2007 and 13.49% on September 30, 2006. The Companys leverage ratio (Tier I Capital to average adjusted total assets)
was 11.64% on September 30, 2007 and 10.21% on September 30, 2006. These ratios exceed regulatory minimums. The Company issued trust preferred subordinated debt that qualifies as regulatory capital in the fourth quarter of 2003. This trust
preferred debt has a 30-year maturity with a 5-year call option and was issued at a rate of three month LIBOR plus 3.00% and was priced at 8.36% in the third quarter of 2007.

LIQUIDITY

Liquidity represents the Companys ability to meet present and future financial obligations
through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. Liquid assets include cash, interest-bearing deposits with banks, federal funds sold, and certain investment securities. As a
result of the Companys management of liquid assets and the ability to generate liquidity through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors requirements and
meet its customers credit needs.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CREDIT RISK AND CONTRACTUAL OBLIGATIONS

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its clients and
to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in
excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments.

The Banks exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit
and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the
Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements but may change current practice for some entities. SFAS 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within those years. The Company does not expect the implementation of SFAS 157 to have a material impact on its consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS 159). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of SFAS 159 is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The fair value option established by this Statement permits all
entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting
date. The fair value option may be applied instrument by instrument and is irrevocable. SFAS 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. The Company is in the process of
evaluating the impact SFAS 159 may have on its consolidated financial statements.



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##### Table of Contents

|Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Market risk is the risk of loss arising from adverse
changes in the fair value of financial instruments due to changes in interest rates, exchange rates and equity prices. The Companys market risk is composed primarily of interest rate risk. The Companys Asset and Liability Management
Committee (ALCO) is responsible for reviewing the interest rate sensitivity position and establishing policies to monitor and limit exposure to this risk. The Board of Directors reviews and approves the guidelines established by ALCO.

Earnings Simulation Analysis

Interest rate risk is monitored through
the use of two complimentary modeling tools: earnings simulation modeling and economic value simulation (net present value estimation). Each of these models measure changes in a variety of interest rate scenarios. While each of the interest rate
risk measures has limitations, taken together they represent a reasonably comprehensive view of the magnitude of interest rate risk in the Company, the distribution of risk along the yield curve, the level of risk through time, and the amount of
exposure to changes in certain interest rate relationships. Earnings simulation and economic value models, which more effectively measure the cash flow and optionality impacts, are utilized by management on a regular basis and are explained below.

Management uses simulation analysis to measure the sensitivity of net interest income to changes in interest rates. The model calculates an earnings
estimate based on current and projected balances and rates. This method is subject to the accuracy of the assumptions that management has input, but it provides a better analysis of the sensitivity of earnings to changes in interest rates than other
potential analyses.

Assumptions used in the model are derived from historical trends and managements outlook and include loan and deposit growth
rates and projected yields and rates. Such assumptions are monitored and periodically adjusted as appropriate. All maturities, calls and prepayments in the securities portfolio are assumed to be reinvested in like instruments. Mortgage loans and
mortgage backed securities prepayment assumptions are based on industry estimates of prepayment speeds for portfolios with similar coupon ranges and seasoning. Different interest rate scenarios and yield curves are used to measure the sensitivity of
earnings to changing interest rates. Interest rates on different asset and liability accounts move differently when the prime rate changes and are reflected in the different rate scenarios.

The Company uses its simulation model to estimate earnings in rate environments where rates ramp up or down around a most likely rate scenario, based on
implied forward rates. The analysis assesses the impact on net interest income over a 12 month time horizon by applying 12-month shock versus the implied forward rates of 200 basis points up and down. The following table represents the interest rate
sensitivity on net interest income for the Company across the rate paths modeled as of September 30, 2007:



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##### Table of Contents

|                          |  |                               |   |  |                  |     
|------------------------- |  | ----------------------------- | - |  | ---------------- | ----
|                          |  | Change in Net Interest Income
|Change in Yield Curve     |  | (Percent)                     |   |  | ($ in thousands)
|+200 basis points         |  | 2.46                          | % |  | $                | 278 
|Most likely rate scenario |  | 0.00                          | % |  |                  |    
|-200 basis points         |  | -2.96                         | % |  |                  | -334

Economic Value Simulation

Economic value simulation is used to determine the estimated fair value of assets and liabilities over different interest rate scenarios. Economic values are calculated based on discounted cash flow analysis. The net
economic value of equity is the economic value of all assets minus the economic value of all liabilities. The change in net economic value over different rate scenarios is an indication of the longer term earnings sensitivity capability of the
balance sheet. The same assumptions are used in the economic value simulation as in the earnings simulation. The economic value simulation uses simultaneous rate shocks to the balance sheet, whereas the earnings simulation uses rate shock over 12
months. The following chart reflects the estimated change in net economic value over different rate environments using economic value simulation as of September 30, 2007:



|                          |  |                                    |   |  |                  |       
|------------------------- |  | ---------------------------------- | - |  | ---------------- | ------
|                          |  | Change in Economic Value of Equity
|Change in Yield Curve     |  | (Percent)                          |   |  | ($ in thousands)
|+200 basis points         |  | -11.48                             | % |  | $                | -4,405
|Most likely rate scenario |  | 0.00                               | % |  |                  |      
|-200 basis points         |  | 12.06                              | % |  |                  | 4,627 



|Item 4. | Controls and Procedures
|------- | -----------------------

Based on their most recent review, which was completed as of the last day of
the period covered by this report, the Companys principal executive officer and principal financial officer have concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Companys management, including its principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required disclosure and are effective to ensure that such information is recorded, processed, summarized and reported within the time periods specified in the SECs rules and
forms. The Companys management is also responsible for establishing and maintaining adequate internal control over financial reporting. There were no changes in the Companys internal control over financial reporting identified in
connection with the evaluation of it that occurred during the Companys last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.



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##### Table of Contents

PART II
OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

None



|Item 1A. | Risk Factors
|-------- | ------------

No changes in risk factors discussed in the Companys Annual Report on Form 10-K
for the year ended December 31, 2006.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None



|Item 5. | Other Information
|------- | -----------------

None



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------

The information furnished herein, including Exhibit 99.1, shall not be deemed to be
filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.



| | (a) | Exhibit Listing
| | --- | ---------------



|               |  |                                                                                                                                                                                                           
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                               
|3(a)           |  | Articles of Incorporation of the Corporation (Appendix 1 to Exhibit A of the Proxy Statement included in Form S-4 Registration Statement (No. 333-33260) filed March 24, 2000,
incorporated by reference).
|               | 
|3(b)           |  | Bylaws (Appendix 2 to Exhibit A of the Proxy Statement included in Form S-4 Registration Statement (No. 333-33260) filed March 24, 2000, incorporated by reference).                                      
|               | 
|31.1           |  | Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.                                                                                                     
|               | 
|31.2           |  | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                                                                                      
|               | 
|32             |  | Certification of Chief Executive Officer and Chief Financial Officer.                                                                                                                                     



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##### Table of Contents

Signatures

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.



|                                         |  |     |  |                                                    
|---------------------------------------- |  | --- |  | ---------------------------------------------------
|BOE Financial Services of Virginia, Inc. |  |     |  |                                                    
|(Registrant)                             |  |     |  |                                                    
|                                         |  |    
|11/14/07                                 |  | By: |  | /s/ George M. Longest, Jr.                         
|(Date)                                   |  |     |  | (Signature)                                        
|                                         |  |     |  | George M. Longest, Jr.                             
|                                         |  |     |  | President and Chief Executive Officer              
|                                         |  |    
|11/14/07                                 |  | By: |  | /s/ Bruce E. Thomas                                
|(Date)                                   |  |     |  | (Signature)                                        
|                                         |  |     |  | Bruce E. Thomas                                    
|                                         |  |     |  | Secretary, Vice President & Chief Financial Officer



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